What is WCT?
WCT refers to Works Contract Tax. It is the taxable rate based on your works contract which is agreed upon between two participating parties, the contractor and contractee. It is vital to learn more works contract in order to learn and understand more about the taxes inclusive in this type of agreement.
The contractor is the one who gives the contract while the contractee is the one who executes the agreements and provisions included in the said agreement. All agreed terms and conditions are basically prioritized so that the main objective and premises in the contract is achieved.
Some of these known contracts or agreements are for work, labor or service. It is not the taxes incurred for the sales of certain goods although there are products which are used for the execution of the contract of service, work and labor. The contract is not always in the form of writing. There are those who have oral or verbal contracts or agreements depending on what both involved parties agreed upon.
WCT states that whenever there are activities undertaken for the achievement of a contract and which is liable to taxable fees as stated by the ‘Works Contract Act’. It must also be governed by the Sales Tax or VAT department as provided or defined by the State Government.
It is important to remember that different states and government also impose varied WCT or work contract taxes. Different types of applications are likewise different such as the taxes in relation to dyeing, printing processing and other related or similar activities is 0.25%. Applications such as roads, bridges, buildings, dams, canals, sewer system and other similar types of infrastructures have 1.50% WCT. Installation plants, water treatment and machinery PSPO have 2.25% taxes and those which are not covered in the other items are given 3.00% WCT.